Verizon to buy Alltel

Alright folks; it’s official. Verizon Wireless has stated that it will buy Alltel for $28.1 billion. Verizon has made a deal according to which it will pay $5.9 billion to Alltel to acquire its equity and assume a whopping $22.2 billion of its debt.

This acquisition will make Verizon Wireless the biggest cellular operator in the U.S. Verizon has 66.8 million subscribers now and by acquiring Alltel, it will add another 13.2 million to its subscriber base, thereby making it 80 million subscribers in total. The current number one operator, AT&T, has around 72 million subscribers.

An interesting aspect to this deal is, Alltel is probably the only company in the corporate history of America to have changed ownership so quickly. Last year, Alltel was acquired by the Texas Pacific Group and the private equity arm of Goldman Sachs for a similar price. This year, it has been acquired by Verizon.

Expectedly, this news has not made a big splash in the market as everyone and his mom knew that this was on the cards. This acquisition tale has been going on for years now and finally, it is official. If you remember, Verizon was actually keen to acquire Alltel last year, but Vodafone, its wireless partner, rejected the deal. But then, Verizon has managed to get what it wanted.

I think this is a perfect set up for Verizon for two reasons. First, both Alltel and Verizon use the same technology – CDMA. Second, Alltel has a good subscriber base in areas which are not covered by Verizon currently. So, it will extend Verizon’s network coverage platform. What do you think?

Categories: All things mobile phones.

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Mobile ads have better recall rates than TV ads

How do you judge the impact of an advertisement? How do you find out if it was effective or not? In most cases, you go by brand recall - the ability of the customer to recall your brand after being shown the ad a few times. Until now, TV was considered the best medium to place ads as it had the highest brand recall rates. But mobile advertising has simply changed everything.

According to reports from analysts, mobile ads have higher recall rates than TV ads. At the recent Mobile Advertising Degree conference, the representatives of Verizon Wireless emphasized the same fact. They also added that despite being costlier, mobile ads are preferred over online ads because they have a phenomenal click through rate.

This is incredible. I’ll explain you why. First, TV has a huge reach. Second, ads in TV are so common that people no longer consider them a problem. Third, a TV screen is more fit for rich ads and watching an ad on a TV screen could be actually fun.

Now, let me compare this with mobile phones. First, a mobile phone, until now, is not considered a primary advertising medium. Second, ads in mobile are considered intrusive by many, so you can’t expect mobile advertisers to start sending ads to all and sundry. Third, watching an ad on a mobile screen, especially a low end mobile phone’s screen, is not exactly a great experience.

Going by what I’ve said above, anyone can say that the odds are stacked against mobile advertising. But guess what? Mobile ads have a phenomenal click through rate of 2% and more, which is way better than online ads.

Now, just imagine. If these kinds of results are possible right now, what could be the case in future when we have more high-end mobile phones, richer ad formats, improved technology, and most importantly, an open-minded society which is not averse to mobile ads? All I can say is one word – unimaginable.

Categories: Cell Phone Advertising.

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Verizon brings live TV to mobile phones

If you are a San Diegan, you can watch live TV right on your mobile phone from now on. How does that sound?

Verizon Wireless has come up with this service which helps you watch TV shows in real time in your mobile phone. Verizon uses Qualcomm’s MediaFlo technology to bring this service to your mobile phone. Incidentally, San Diego happens to be the 58th market to get Verizon’s V Cast Mobile TV service.

Verizon thinks it can attract a lot of subscribers to its live TV service as it offers a variety of networks like NBC, CBS, MTV, FOX, ESPN, and Nickelodeon for users to choose from. The service will cost you anywhere from $13 to $25 and it gives you the choice to watch live TV shows from all the aforementioned networks.

In my opinion, Verizon’s mobile TV service is good enough to attract some subscribers. I think it is way better than watching downloaded video clips on your mobile phone. It’s live TV and people can watch their favorite news channels, sports channels, finance news channels, and other channels on the move which could be really convenient. However, only four of Verizon’s phone models support this live TV service, which I think is a definite downside. You can’t expect everyone to own an LG Voyager, can you? On a side note, I think this move could actually revive the stock price of Qualcomm which has remained stagnant for quite some time now!

Most importantly, if you happen to live in San Diego, check out this service and let me know your thoughts.

Categories: Cell Phone Advertising, All things mobile phones, Mobile TV.

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What does Verizon’s victory in the auction mean to Vodafone?

The impact of the FCC’s 700 MHz auction is amazing. I mean, who would have ever thought that the results of FCC auction could have an impact on the stockholders of Vodafone? Confused? Read on.

Verizon Wireless, in case you don’t know, is a joint venture between Verizon Communications and Vodafone. Now, as we all know, Verizon has won a major chunk of the wireless spectrum in the recently concluded auction. It paid close to an astronomical $5 billion for the licenses it acquired and it has got reflected in the stock prices of Vodafone.

Investec, a prominent South African bank, has advised its clients to sell Vodafone shares as it predicts its dividend payments to be delayed. Now, I’m not a stock market analyst or something. In fact, I have no idea of anything remotely associated with stock market. Could someone explain this?

Categories: All things mobile phones.

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Google in 2007 - A review

2007 was a great year for websites, newspapers, magazines, and blogs, thanks to Google. Simply because, Google was one of the biggest newsmakers of 2007. Everyone knew Google was working on something which could make it a top contender in the cellphone advertising market and guessed it would be the so-called Google Phone. But then, it turned out to be Google Android, a mobile platform, which made headlines all over the world.

Especially, with so much hype surrounding Apple iPhone, Google was forced to come up with something that would not just take the attention away from the iPhone, but also change the market once and for all. Google Android was the perfect answer and the announcement made big news in the market. There were so many reasons behind the market’s excitement – it was Linux based, it was open-source, and it came at a time when Google was aiming for the FCC Auction for wireless spectrum in Jan 2008.

I’ve already stated why Google Android could be the welcome change the market needed and I think it has enormous potential to become the most-used mobile platform all over the world. Especially, with the alliance Google formed with 30 plus big names in the industry, they made sure everyone took notice.

Earlier this year, Google made a proposal to Verizon Wireless to have its search application and other things incorporated into their mobile phone, but Verizon refused due to their difference of opinion with Google in terms of the advertising revenue. It was at this point of time that the market was going wild with speculations that Google might become a carrier and might come up with its own phone and all that jazz. Thankfully, Google quickly put an end to all the speculations with its Android.

Also, there were speculations in the market that Google might even bid to lose in the FCC Auction, as the winner (which could be Verizon) is required to open its network with the competitors anyway. But considering Google’s interest in 700 MHz wireless spectrum, I’m not too sure if Google would actually do such a thing.

This year, Google also came up with the beta version for Mobile AdSense which can be used in mobile sites. A lot of Google’s applications went mobile this year, including YouTube which got incorporated in Apple iPhone.

Google made news with its every move this year and I have no reason to believe that next year would be any different. We’ll have more news on Android and Google’s mobile applications, as it tries to expand its dominance further in the cellphone advertising market.

Categories: Google.

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